Business Analysis of Wal-Mart Research Paper Example | Topics and Well Written Essays - 1250 words

Business synopsis of Wal-Mart - Research Paper ExampleWal-Mart is among the top ranked discount warehousings in USA and it is also leader of the boorishs retail industry.The store was the scratch line one to introduce the concept of providing low price goods and services to customers at their convenience by locating its stores near customers residency. The store was the first one to introduce the concept of providing low price goods and services to customers at their convenience by locating its stores nearby customers residency. In 1962, first Wal-Mart store was opened in Rogers, Arkansas. According to Freeman (2006), Wal-Mart is given the top ranking in terms of the total sales that atomic number 18 made by the store alone. The retail offers variety of products that comprise of family apparel, electronics, household needs, electronics, fabrics, jewellery, shoes, crafts, health and beauty products and lawn and garden accessories along with pharmacy store, Photo processing centr e and Tire and lube Express (Walmart Stores, 2012). In 1991, Wal-Mart opened its first store in Mexico and marked the beginning of its international ope symmetryns. Currently, Wal-Mart has about 10,185 stores and also locations of clubs in almost twenty-seven countries it is employing more than 2.2 million people who are serving approximately 176 million numbers of customers every year (Next-Gene ration Wal-Mart, 2012). The annual growth rate of store is about 22% in country and internationally it is about 58% (Ambartsoumian, 2011). Financial Statements Analysis In order to evaluate the exercise of any business, it is important to analyze its performance both from its financial statements and by doing comparison with its competitors. First, it is important to review the performance of Wal-Mart in the last couple of years which can be extracted from evaluation of its financial statements. The summary of financial performance of Wal-Mart is represented in the form of table after a nalyzing its Balance Sheet, Income Statement and Statement of Cash Flows (ttm stands for Trailing Twelve Months) The in a higher place table shows that companys performance is increasing despite recession going on in the world. Management of the store is effective as is ostensible from the ratios of Return on Assets and Return on Equity it shows that management is performing its function properly so that stores performance gets boosted. Wal-Marts financial statements analysis shows that it is still in multi-billion bracket and is also paying off good amount of dividends to its shareholders. One area of concern is total debt to equity ratio which is higher the company that is performing well has lower debt to equity ratio. The main reason for increase in debt is its heavy investment done in technical avenues which were done via loans from banks and financial institutions. The current ration of store is also less than 1 which is not a good indication because it shows that current as sets of store are less than current liabilities. Although considering its stock market performance which is showing increasing trend but there are some issues internally that needs to be addressed. Since the competition in retail industry is getting competitive, it is mandatory for the stores to ensure that they can compete with the existing and new entrants in the market. Overall, financial health of store is fine and smoothly progressing in retail industry it is expected to grow exponentially worldwide. However, the main area of concern for management team is its current ration and rise in expenses the team will have to ensure that it is able to pay off its debts well within agreed time period. Competitor Analysis The main competitors of Wal-Mart are Target Corporation and Costco. According to Ambartsoumian (2011), discount retailers growth